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, not looking at 6.5% threshold but the broader conditions, a big debate, steve liesman's nemesis talks a lot about people being beamed to mars in. your mind what is happening to the job market? are we creating jobs? is that why it's coming down, or is it because people -- the degree of discouraged workers? what's your sense of how quickly it's fallen because of new employment? >> so on the first question the chain cpi versus the fixed weight cpi is a technical issue. the change cpi is better for most economists because it allows for changes in the mix of goods and services that people actually consume more effectively. however, whether that's more appropriate for say social security indexing or not, i think that's ultimately a political decision. i suppose the rejoinder would be that neither the cpi nor the change cpi may be particularly a good measure for the cost of living of social security recipients, so those are the kinds of questions that congress is going to have to deal with. second part of your question was -- >> what actually is happening to the debate over the extent to which une
. steve liesman up next with surprising new results from the exclusive cnbc survey. >>> and then as the lawsuits fly over hewlett-packard's autonomy mess, i'll talk with the ceo of deloitte and their role in looking over the books. ally bank. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan. tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world tdd#: 1-800-345-2550 as if i'm right there. tdd#: 1-800-345-2550 and i'm in total control because i can trade tdd#: 1-800-345-2550 directly online in 12 markets in their local currencies. t
liesman. steve, we just said the market was way up today, they thought we would have a deal. now we're headed over the cliff. this can't be good news for our economy. >> reporter: it definitely would not be. and if you take all the things that kelly mentioned and add them up, that's about a 4% hit to gross domestic product. we put that into perspective. we're only going to grow about 2 or 3% this year. what does that mean? it probably means a return to recession, it means higher unemployment. it means more uncertainty as chuck todd was just talking about. if you imagine yourself a business person, thinking about making an investment in a factory, well, if i have to tune into "nbc nightly news" every night to figure out are we going to have a deal, that's not the kind of climate you want for investment and for jobs. >> and you were saying, this at a time when we were seeing some good signs in the economy for a change. >>. >> reporter: that's right. we're about to snatch defeat out of the jawses of victory here in the sense we were growing at 3% in the third quarter, we might do 2.5%
conversation with our steve liesman. in corporate news, the apple coming off its worst day ofs losses this almost four years. u.s. equity futures, though, not too bad so far today. indicated up about 15 points. today is thursday, december 6th, penultimate day before the day of infamy. "squawk box" begins right now. >> welcome to "squawk box." i'm becky quick along with joe kernen. andrew ross sorkin is on vacation this week. onset with us is drew mattis. welcome. thanks for getting up early. >> i'm always up at this time. >> we'll be going through secretary geithner's comments, but first let's get you up to speed on other stories. joe was talking about apple. it has been a rough ten weeks for the most valuable u.s. company. shares tumbling more than 6% yesterday shedding $35 billion of market value. among the reasons cited by analysts, a forecast by an influential research firm suggesting that the iphone and ipad maker is continuing to give up ground it rival the android gadgets. there were also unconfirmed reports that at least one major stock clearing house was raising margin
26 days away from the fiscal cliff. steve liesman joins us now live from the treasury. he has an exclusive interview with one of the key negotiators at the white house, secretary of treasury timothy geithner. >> maria, thank you. i'm here with the secretary of treasury at a crucial time. thank you for joining us. >> thank you. >> speaker boehner has put forward a proposal which "usa today" says demonstrates more political courage the democrats have shown. the white house is saying today it's not even wor ty -- worthy of a response. what are we missing? >> i think we are making progress. they acknowledged they were prepapered to do $800 billion in higher taxes on part of the american economy. that's part of the balanced framework. that's definitely progress. what we need to see is have them acknowledge the rates go up. if they're willing to accept that and commit to that, then we think we could do something good for the economy. we can make the government use the taxpayers' money more efficiently, lock in some spending savings and do some long-term entitlement reforms to make s
. senior economics reporter steve liesman and our own rick santelli. make guys, guys. steve, where do we stand on this with the new target, the new way of looking at monetary policy? >> you know, bill, i wish i knew more. i think it's really unclear at this moment. what the federal reserve is saying is instead of saying the funds will remain low through mid-2015, it's saying it's going to keep rates low as long as unemployment is at least 6.5%, right? so it's not more than. it's at least 6.5%, and inflation remains subdued. at 6.5% the federal reserve could still keep the funds rate low, and it could -- as long as inflation is subdued. >> okay. >> i'll just tell you there's a lot of questions, bill, about what that metes means en route to 6.5. >> 6.5%, do you think it's possible that we could be at 6.5% in one year? >> a lot depends on how we get there, and the fed chairman was asked about this yesterday. clearly he looks at the internals to the unemployment rate. if we get there through a decline in the participation rate instead of, for example, people being hired, then i think that's
this morning. our steve liesman is at headquarters. steve, it feels like we've been around the world and back since you started breaking news on the white house offer last night. what's your read right now? >> i'm trying to get a feel for what the gop strategy is right here. we had senator corker, as you guys mentioned on this morning, saying he sees nothing new here. sort of began the conversation saying he saw nothing new. kind of agreed at the end that there had been some movement. i think there have been pretty significant steps by the president. but that doesn't mean that they're significant enough for the gop. you know, him saying that this 250 which had been previously immutable is now essentially mutable. that was a concession. and geithner previously told me they will not do a deal without a permanent debt ceiling fix. now they're saying two years. also the cpi chain thing will reduce payments to social security. so that's a pretty big step forward. i think maybe both sides are in negotiating positions. but also seeing this as a final offer. it's our understanding that the white hous
. is there hope? you don't have to. you can depress us if you'd like. >> it's hard to have hope. but steve liesman was walking by a little while ago. he had a trip of bernanke talking about what the assets is for and what the fed funds rate is before and for the life of me it's really hard to reconcile what he said. he said these are two different objectives. one is for short-term stimulus, one is for longer-term economic management of some kind. and i, you know, that's the first time that he has talked in those terms about how they are really different objectives, like tools. i think for most people this is about you either ease financial conditions or you tighten them. so, if it's getting a little -- i think even the fed -- >> communicating at this point. >> i've been -- i've thought that for awhile, actually. >> because i think maybe just the message is getting confused in the marketplace, and maybe what's happening in front of us now was always happening behind the scenes. you know better than i do, but we just didn't appreciate it. >> you know, the feds have this ongoing process of communicat
'm becky quick along with joe kernen and steve liesman. the november jobs report is now just about 150 minutes away. count do countdown is on. the economy probably added about 80,000 jobs last month. reuters consensus is a little higher at 93,000. the unemployment rate expected to hold steady at 7.9% and economists say the slow down in nonfarm payrolls will reflect the effect of sandy. joining us this hour is bank of america merrill lynch global research senior research economist michelle mire and we'll talk through everything that's been happening through jobs and what to expect. but first, there is a developing story. an earthquake off the northeast coast of japan triggered a tsunami warning. the warning has been lifted, but it was a 7.3 quake. so far no reports of any injuries or damage. it was for the same area devastated by an earthquake and tsunami back in march of last year. we will continue to bring you any developments. in the meantime, steve has some of the morning's top other stories. >> let's start with the markets. asian stocks rallying to 2012 highs overnight. the nikkei
is just amazing. steve liesman's exclusive with lacquer. one more look at futures this morning. we'll cover what 10% on squawk earlier today. and a lot more when "squawk on the street" comes right back. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade. it's another reason more investors are saying... who helped make slea difference last yearose for thousands of california foster kids. thank you for helping foster kids. thank you for the school supplies. thank you for the new shoes. thank you, secret santa. and thank you for donating money. your generosity proves that while not everyone can be a foster parent, anyone can help a foster child. - thank you. - thank you. gracia
about the outlook for economy and housing. steve liesman sat down with jeffrey this morning to get his take on the state of the economy and where it might be headed in 2013. joined by steve with fascinating highlight from that. >> thank you, sue. subdued inflation of 1.8%. was he important part lacquer's estimate it would take get to 6.5% o unemployment. you remember, lacquer desentd -- excuse me, what was that? dehe is noted from the meeting. explained this descent. >> it should be clear that this committee is straining. to provide as much stimulus as possible without endangering our price stability. my worry and the reason i descented on this and asset purchases, is that we seem to be test the very limits of that credibility. >> he would prefer -- he upported the dropping of the calendar date but wanted unemployment and labor market to e described in much mor terms rather than quantitative terms. he also suggested that the to be not e needs just for the short term but long-term. charlotte the launchon commerce where we are here, he said cannot assumer spending on the 6% year on ye
're going to hear tomorrow, in the next hour, when steve liesman will join us with results of our fed survey. >>> an oh beck minister, important events. opec ministers are in vienna. >> why vienna, by the way? >> i don't know why they originally set it there, but it seems like as good a place as any. have you been? >> i have not been. >> i don't think i've ever been to vienna. i always wondered about that. >> i mean, it's better than meeting in, i don't know, skokie, right? they're expected to retain its 28 million barrel a day output target. but the real drama is likely to be about leadership, the world's leading oil exporters are expected to argue about who should be opec's next secretary general and we have candidates from iran, iraq and saudi ara a arabia. they're all competing to replace the current leader, as you can see there. abdallah salem el badri, he's 72 years old and he's been there for years. i don't know where i've been for five years, but did you know -- >> i apologize in advance. i didn't. >> you could have said you did and we've been best friends, in fact. >> he's complete
ahead? steve liesman has that for us. >> this could be the fiscal cliff game at home report. now that there is a plan in motion, can you see some of the things that are in play here. the revenue side of the fiscal cliff $520 billion, spending side, $130 billion. some piece of that is going to go away if indeed they do end up capping the increases of those at $400,000, 450 and above. we don't know how much. perhaps the vast bulk of it could go away. no discussion on wlornt automatic spending cuts for this year would be affected at all. there's the total 650. impact of the total fiscal cliff this year and by way of contrast or comparison, here is the gdp effect. we gained in nominal terms and that's why going over the cliff means negative growth, it means a recession. here is some of the detail of what we ever talking about here. 620 billion. that's the total revenue. depends on which numbers you use. moving on, per capitia effect, it affects different people differently. 26.2 million is the number of americans that will see an increase in taxes subject to amt that alternate taxati
forever. joining us now, steve liesman and an economist from ftm financial. steve, is it really as bad as all of that? we're talking about some very anemic numbers. >> the question is, what part is bad? i really disagree with this report in the sense that i don't see how he can possibly know what the growth rate is going to be in 2050. i don't think he knows what the growth rate is going to be next year let alone in 2050. the second thing wrong with this prediction is growth rates are something that are within control of a society or nation. with the policies -- now, i think he's right we're aiming right now for a growth rate that may be unattainable. long-term, a society cannot exactly choose but can adjust this level of growth. third, some of the things that he's most concerned about, for example, global competition, are some of the things that make me optimistic about the future, not pessimistic. >> but lindsay, part of his reasoning is we're adding too much debt to the equation. debt servicing takes up more of our growth at this point. too many band-aids solving problems that need
. steve liesman reports that the white house is now proposing leaving lower tax rates in place for everyone except those earning $400,000 and above. yeah. i read that everywhere. liesman? liesman is agreeing with what is written everywhere? that's excellent, steve. good job. that's up from $250,000 and did you know? no one else cited him. they need to cite him. i don't like it when they don't. >> they should. >> the president has been demanding for months, it's a little above the $250,000. it's still below the $1 million that john boehner wants. we've been saying all along it probably goes up to 500. >> maybe you get up to 650 at this point. >> and then we have to decide, does it go back to 39.6? >> yeah. i had seen yesterday that there was some commentary -- is it 39.6 or 39-7? >> 29en 6 of. >> some commentary that john boehner has said okay on the 39 39.6. >> and the president said for two years. they would like to do it by christmas. i think that would be nice if they did it by christmas. you're watching "it's a wonderful life." and you realize that both sides rose above and
, god. see i'm not going to read this. don't miss steve liesman's exclusive interview -- see the company wants me to read this, 4:00 p.m. today at 4:00 p.m. that's good. you're with geithner? [ penélope ] i found the best cafe in the world. nespresso. where i never have to compromise on anything. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is only made with fresh milk. and where the staff is exceptionally friendly. ♪ nespresso. what else? ♪ well that was uncalled for. folks who save hundreds of dollars switching to geico sure are happy. how happy, ronny? happier than gallagher at a farmers' market. get happy. get geico. chances are, you're not made of money, so don't overpay for motorcycle insurance. geico, see how much you could save. >>> the oilers moved to tennessee where there is no oil. the jazz moved to where they don't allow music. >>> the nba's new orleans hornets making headlines, not for tonight's game against the lakers, but because of a possible name change. that team is expected to change the names to the pelicans as early as th
. speaking of which, i'm glad you brought that up. our steve liesman interviewed the treasury secretary a couple of days ago and had a question for him. i wonder if you would listen to this piece of tape and get a reaction on the other side. >> i want to understand the administration's position when it comes to raising taxes on the wealthy. those making more than $250,000. if republicans do not agree to that, is the administration prepared to go over the fiscal cliff? >> absolutely. again, there's no prospect to an agreement that doesn't involve those rates going up on the top 2% of the wealthiest americans. it's only 2%. >> dr. krueger, as the man who is maybe more than anyone the steward of the economy itself, are you okay with that? >> absolutely. the president made clear during the election that he wants a balanced approach, that we can't afford the tax cuts for the most fortunate among us. that the way to provide opportunity and build the middle class in this country is to get on a fiscally sustainable path and to ask wealthiest to pay a little bit more. president couldn't have bee
of weakns in the participation rate and downward provisions to earlier reports. steve liesman joins us next with more on how economists are reacting to those numbers. >>> tomorrow, "squawk box" is kicking off a special day of fiscal cliff coverage. rise above: mission critical. becky quick and jim cramer, live in washington. 33 special guests, grover norquist, congressman jim hencer link, senators from both sides of the aisle, corker, warner, johnson, conrad reaching common ground on the debt deal. to the best vacation spot on earth. (all) the gulf! it doesn't matter which of our great states folks visit. mississippi, alabama, louisiana or florida, they're gonna love it. shaul, your alabama hospitality is incredible. thanks, karen. love your mississippi outdoors. i vote for your florida beaches, dawn. bill, this louisiana seafood is delicious. we're having such a great year on the gulf, we've decided to put aside our rivalry. now is the perfect time to visit anyone of our states. the beaches and waters couldn't be more beautiful. take a boat ride, go fishing or just lay in the sun. we've go
the impact. >> lower bang for your qe buck as steve liesman put it earlier on. >> thanks for joining us. always good to see you, eyore pento. >> putting fire into the conversation. >> thank you. >>> so much for the holiday cheer. with the rate things are going in washington, there will be plenty of holiday jeer between now and the new year. >> the president's called for $1.4 trillion worth of revenue. that cannot pass the house or the senate. >>> well, two former presidential candidates face off after the break. i feel like i'm going back to 2008 or 2004. steve forbes says no tax hikes for anybody while howard dean argues everybody needs to pay a little more in taxes and not just the upper income. both sides of that coming up here. >> and also just ahead, the ceo of a tech company says he may be forced to cut jobs because of washington's fiscal follies. he's going to be here. he's going to explain how bad it will be, not just for him, but for other companies as well. >> and then later a retail boom on main street and wall street. with just two weeks to go until christmas, we'll tell you
proposals on the table, show you the differences. our senior economics reporter steve liesman has the fiscal clifferences. >> we're only going to do revenue. we're not going to do spending. come back tomorrow and hopefully get more spending. let's just do revenue. it's enough. >> clifferences. >> the first thing here, let's look at tax increases. what we understand with the new proposal of obama to raise tacks on those making $400,000 and higher, that would raise $600 billion in revenue. we believe the revenue side from the gop is $460 billion. just a warning on the gop. not getting exact numbers from here i ran them by a high-level gop source, he says they are not far off. the gop says the difference as 235, they see another $95 billion in revenue obama administration would raise. let's go on and take a look at the other key area, which is deductions. 540 for gop and $500 billion for democrats is all over 10 years, a minor difference right there. just so you know 46 to 50, could be 50/50, summer in that neighborhood. moving on, the estate tax, $100 billion, going back to the 2009 levels. th
a deal. steve liesman with results of our cnbc fed survey. what are they saying? >> sue, i'm afraid it's not good news. our survey, they think the probability of recession is going up. most of that is because of fiscal cliff. can you see here the current probability, 28.5% we'll have a recession in the next 12 months. we had a low in march of almost 20%. that compares with a high. remember the debt ceiling debate of 36%. that chance going up. i want to show you in detail what dan greenhouse wrote in with his response in the survey. if the cliff is triggered and the cuts/tax increases remain in place for several weeks or worse, several months, it's hard to construct a scenario where the u.s. economy is not in recession. this is what's interesting here. recovering from that recession is not as simple as fixing the cliff's issues. the u.s. economy is not a light switch. you don't turn it back on. so the question, will we go over the cliff? on the first, looks like no, we won't go over. we'll avoid it. 41% say, yes, we'll go over, 46% say we won't. look at this, 13% don't know. we talk abo
b in case talks feel. steve liesman is here with more on where we stand on a possible deal. have you talked to any since yesterday or have you just been musing and thinking with that big brain pan of yours. >> no. mostly i've been sleeping and drinking. >> we assume that. >> as you know, i've been on the phone pretty consistently since leaving the "squawk" set yesterday. i want to preface what i'm about to report. this is about the hardest thing i've done. i think i've reported really complicated stories, t.a.r.p. and securities in the fiscal cliff and fiscal crisis, explaining where they are is like a football game and the lights have been turned down and you have to guess where they are. my second chart, i have never done this before, i know the second chart is wrong but it's the only way to present to you where the sides are. let's start off with what i think is right, the revenue side and i think they're pretty close. tax increases, dems ahead of republicans, 600-460. i have to say the republican side requires me to make certain assumptions i have run by the gop side and they tel
president. and richard, one of the questions i want to ask, i was talking to steve liesman about this yesterday, do you think that your board and your chairman is now effectively overcommunicating to the market to the point where we don't really -- we actually understand less rather than more about what's going on? >> well, the verbiage that we put out after every meeting has expanded significantly. the theory is that we want to signal to markets in a sufficient matter so that we don't surprise them. and very importantly, they can anticipate in a way with, again, greater certainty. the path we're likely to follow. the most important thing, of course, to communicate, will happen after we begin to tighten. we'll call that post-liftoff. >> but in the same way -- >> but you're right, andrew, from the standpoint that there's a lot of verbiage hire. and i don't know if it's actually -- we'll have to just watch this. i don't know if it's creating more confusion or not. i'm of the old volcker school. i would be communicating as little as possible. but there is a demand for greater transp
steve liesman joins us now with more. >> in that press conference just a few minutes ago, the speaker holding out at least some hope something could still get done, either before the end of the year or shortly after that. the speaker's main points is the house is ready to return when needed. he suggested the house would vote on a senate bill. he did that toward the opposite way saying he hasn't seen one yet. and saying he has not walked away from talks with president obama. now, from the white house side, it seems the president has changed his goal to only a tax deal and perhaps only a tax deal for those making $250,000 and below. not the $400,000 number he offered to boehner. you figure it out from this statement last night from a presidential spokesman. the president's main priority is to ensure that taxes don't go ul on 98% of americans and 97% of small businesses in just a few short days. it looks like they are trying for just that, $250,000 piece, and below. continue the tax cuts from the bush administration. the speaker did say the failed vote will not endanger his speakership.
. and then, you know, i don't think we've run this bite enough. >> tim geithner told steve liesman. >> i have it ready. >> that he is we should show it multiple times. >> tt is the administration prepared to go over the fiscal cliff? >> oh, absolutely. there's no prospect to an agreement that doesn't involve those rates going up on the top 2% of the wealthiest -- remember, it's only 2%. and all of those americans get a tax cut on the framework of the first $250,000 of their income. >> yeah, yeah, you still get the 250, andrew. they love that. what does oh, absolutely mean, bob? >> maybe it means his favorite movie was "rebel without a cause." >> go the. >> i guess it's letting the other side know you're willing to go eyeball to eyeball with something that is terrible. >> i see both sides pretending to say, yeah, we're doing all we can, but it's almost just like this -- like boehner just said, hey, you guys, you happen, in the democratic-controlled senate, you put a bill together. i'd love to consider it. he can't get his guys to consider a democratic bill. >> as long as they feel like they ca
continues over the fiscal cliff. today the president h showcasing -- steve liesman asked the treasury sec temporary about the possibility of going over the cliff. >> i want to understand the administration's position when it comes to raising taxing on the wealthy, those making more than $250,000. if republicans do not agree to that, is the administration prepared to go over the fiscal cliff? >> absolutely. there's no pros teblpect to the agreement that doesn't involve taxes going up on the wealthiest 2%. remember it's only 2%. >> i talk every day to our customers around this country, around the world sometimes for that matter too, but around the country, and they are all scared to death what happens in january, nobody knows, but all i know is going over the cliff is too hot to handle, it's an option we just can't stare in the face and there's no way we can do it. they will get us through this in one form or fashion. >> interesting call. conventional wisdom, obviously the white house and the secretary hardening their line, and a lot of people are saying the republicans are starting to fray
over the fiscal cliff. what happen fess we don't in steve liesman's predictions. >>> have you bought an apple product on-line from anyone? if you have, listen up, snatch and grabs are plaguing apple users throughout the country and are making their way on-line. [ male announcer ] citi turns 200 this year. so why exactly should that be of any interest to you? well, in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. like the transatlantic cable that connected continents. and the panama canal that made our world a smaller place. we supported the marshall plan that helped europe regain its strength. and pioneered the atm, so you can get cash when you want it. it's been our privilege to back ideas like these, and the leaders behind them. so why should our anniversary matter to you? because for 200 years, we've been helping people and their ideas move from ambition to achievement. and the next great idea could be yours. ♪ executor of efficiency. you can spot an amateur from a m
of stimulus and policy changes but the markets don't seem to care much. steve liesman is here with more insight on all the fed's moves. steve. >> thanks. one thing i think we can say for sure, chairman bernanke has to be surprised at what's effectively been a hawkish reaction to the massive policy changes he put in place yesterday. those policy changes include an announcement that the fed would boost its monthly purchase of assets to $85 billion. that would be a trillion dollars in a year, and also link interest rates to unemployment. it became the first essential bank to link its funds rater overnight rate to the unemployment rate. these dovish moves have received a hawkish response in the market. gold is down on about 20 bucks or so. the ten-year note is off here, but since yesterday, it's off about ten basis points. and the dow may be up right now, but essentially it's been down since yesterday at 12:30. it's unclear if the market doesn't understand the fed's new communication or if it simply sees the 6.5% unemployment rate as closer in time than the fed does. i want to share with yo
to see you. also steve liesman is here with us on set this morning, but, j.j., why don't we start things off with you and talk a little bit about what's happening, what you see with some of this movements in and out of the headlines around the fiscal cliff. it's not adding up to a lot of volatility even though we've seen swings with the major averages. >> it's almost to the point maybe we should get the nhl guys and the government in at the same time and solve both on the same day. but, you know, really, beck, it's kind of interesting right now, you look at the s&ps, they're not moving much. there are things to trade. gold is down almost 10%. and you touched on the stocks which i think gave the market quite a bit of hope in toll brothers. you talked about the backlog orders and orders coming up. the amazing part is the orders are up 70% going forward. so, we are seeing a lot of positive signs in the economy. it's almost like, you know, talking to so many of the other traders, everyone is saying i wish the government would get out of the way almost and get this thing solved and get on the
from the fed decision. steve liesman is in washington with the preview. >> are you excited about this, melissa is this. >> of course. >> you should be. there is a substantial change about to take place to the fed's balance sheet today. i'm not hearing much debate in the market. markets overwhelmingly expect the feds to announce today it will replace operation twist with a new program to purchase assets outright. that is, instead of swapping short-term assets for long-term ones, which didn't grow the balance sheet, it will now purchase just those long-term assets. printing money essentially. this will mean explosive growth in the feds' balance sheet. hee are the numbers. first, the federal reserve right now is existing level is -- the current purchase of $40 billion a month. expected now to purchase $45 billion for a total of $85 billion. now, let's look at the effect on the balance sheet. the next screen, what we see is the existing level is $2.8 trillion. it's going to add $1 trillion now, the 2013 level will be $2.8 trillion. compared to $300 billion for $3 trillion of reserves in t
to discuss the next steps. we don't know exactly what those next steps will be. steve liesman might. he joins us now with the latest. >> but, but -- >> the market's not down because it didn't pass. because it was never going anywhere anyway. it's down because what it says about the negotiation. >> just total dysfunction. i think that's exactly right. that's what my report really says. both the white house and the gop is that no one expected plan "b" to fail. >> right. >> so what i could tell from being on the phone last night is that neither side at the moment has a game plan for the post-plan "b" failure world. late afternoon yesterday, white house officials were trying to game out the world after plan "b" passed. and i had some discussions with the folks about where they might go from here. asked what the next steps were after plan "b" failed later in the evening, a white house source only responded, quote, it is all a mystery. it seems now that the president has changed his goal to only a tax deal for those making $250,000 and below. which by the way was the deal, was what he wanted before
for the economy in the new year. here is steve liesman with a preview of what he expects in 2013. >> trying to figure out what's going to happen in 2013 depends on one very important development. whether the u.s. goes over the fiscal cliff in a few days' time. and, for how long. if it's avoided, there's considerable upside for the economy. we could see at least one, and maybe two quarters of growth above 3%. the kind of growth that would put people back to work and lower the unemployment rate. why? because business has been holding back investment under the uncertainty, unleashing business spending would add to the growth from the rebound in housing and from the consumer who has hung in there despite tough times. in fact, we could see unemployment drop below 7%. although it might first rise, and people come into the workforce will be discouraged but then it could start to fall. as for the fed i think the market may be overstating its expectation for asset purchases from the central bank in 2013. at the current pace the new round of quantitative easing will add $1 trillion to the balance she
. as the deadline for the fiscal cliff does loom, what does it peen if your money if we do not get a deal? steve liesman has more on that. >> we talk about a lot of these big numbers that are out there and we don't talk about what it means to individuals. so let me see if i can break down the big numbers into something that might mean something to individual people here. $620 billion, that's the number that's the total revenue increases and spending cuts. about $130 billion of the automatic cuts that john harwood was just talking about, talking about trying to ally for a little while. 1920. that's if you break it down by every man, woman and child in america. that's the per capita fiscal cliff effect. but that effects a lot of people differently here. $26.2 million. that's the number of americans that will be caught by the amt, the alter naf tax system, unless congress comes up with a patch and that's part of the whole fiscal cliff effect. come on over here, we'll show you more. 2.1 million, that's the number of long term unemployed americans who will lose the extended benefits again if there's
? >> steve, thanks for that. that's interesting stuff there. >> nothing like getting your blood pressure up. liesman testing you live on tv. >> what do you think? wrong, wrong. brought back bad memories, huh, carl? 2013 housing market outlook this morning, according to the report there will be an increase in new residential construction activity, and also recovery in home repair and remodel spending next year. robert, some of the stats are staggering. it's not just an increase in starts, you're looking for 950,000 starts. that would be a 22% increase. what's the primary driver of this? is there really that much demand out there for 950,000 new starts? >> we're looking for three things. tighter inventory levels, stable pricing environment, and low interest rates. so collectively, we think these three factors would definitely drive demand verystantially next year. it's been a terrific year for the home builders. we think we're still in the third inning, not the seventh inning. both for fundamentals and the stocks. >> is there a part of the market we'll see the most building? is it the lower e
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